The conversations are exploratory, and the people describing them asked not to be named because the talks are confidential. G42, the Abu Dhabi-based artificial intelligence group, has held tentative discussions with prospective investors about raising several billion dollars, according to people familiar with the matter. The structure and size of any deal have not been settled, the people said, and the discussions could still produce nothing. What is clear is the direction of travel: one of the Gulf’s most important technology companies is preparing to let more outside capital in.
If a raise proceeds, it would extend a pattern among companies with roots in the United Arab Emirates’ state-linked economy: opening the ownership structure to outside money to fund ambitions that even deep state pockets are being asked to stretch. G42’s existing investors already include Mubadala, the Abu Dhabi sovereign fund; Silver Lake, the American private equity firm; and Microsoft, which invested $1.5 billion in 2024 and took a seat on the board as part of a sweeping partnership that put G42’s applications on Microsoft’s Azure cloud.
G42 is the most prominent of the Gulf’s AI holding companies. Founded in Abu Dhabi in 2018, it builds and operates some of the region’s most ambitious computing projects, from data centers and supercomputers to health-related AI, and it has signed up Western partners including Microsoft and OpenAI as it pushes to make the emirate a hub for artificial intelligence between East and West. Peng Xiao, a computer scientist who has led the group for several years, serves as its chief executive.
The company has spent the past two years repositioning itself as a United States-aligned partner. After questions from Washington about its early ties to Chinese technology companies, G42 worked to unwind those relationships and signed an intergovernmental assurance agreement with the U.S. government as part of its Microsoft deal. The fundraising talks are consistent with that turn: the firm is looking for capital from the same global investors who have been financing the AI buildout in America.
That repositioning has carried costs as well as benefits. G42 has pulled back from projects and partners that drew scrutiny in Washington, and large parts of its technical roadmap now depend on American technology, from Microsoft’s cloud to accelerators supplied by Nvidia and other U.S. chipmakers. To Western investors, the result is a company that looks less like an unknown quantity and more like a regional edition of the AI businesses they already fund, with one difference: this one sits on sovereign capital, government support and Gulf energy.
The uses for the money are not hard to guess. Artificial intelligence infrastructure has become one of the most capital-intensive businesses on earth, and G42 has been scaling computing capacity as fast as it can secure chips and power. Sovereign-linked groups across the Gulf have reached the same conclusion, that the pace of the AI race outstrips what balance sheets can carry alone, and several have begun raising outside money, through debt or equity, to share the load.
An equity raise of several billion dollars would rank among the largest private rounds in the AI industry this year, and it would test how far global investors’ appetite for Gulf technology reaches. For investors, the appeal is a stake in a state-backed AI champion without taking direct sovereign exposure. For G42, outside capital brings a market price for its businesses and a stamp of approval that state money cannot confer, at a moment when the group is spending heavily to keep its lead over rival efforts elsewhere in the region.
A company representative declined to comment on the funding plans, saying G42 remains focused on its long-term growth strategy. The people familiar with the talks echoed the caution, noting that the potential financing’s structure and scale have not been finalized and that the participants could change before anything is announced.
The Gulf has become one of the busiest theaters of the AI funding boom, and a round of this size would extend it to the region’s own champions rather than only to the American companies those champions finance. The appeal to investors is operational as much as financial: groups like G42 control capital, energy and government support, three of the scarcest inputs of the AI buildout, and they are looking for partners who bring software, customers and credibility in return.
The context is competitive as well as financial. Saudi Arabia and other Gulf states are pouring money into their own AI projects, and Abu Dhabi wants G42 to remain the region’s flagship. Deeper ties with American capital and technology also carry a practical benefit: access to the most advanced chips, whose export to the region remains a matter of U.S. policy and oversight.
For now the exercise is partly signaling. A group that already commands sovereign backing does not need outside money to survive; it wants outside money to grow faster and to certify that growth. The open questions are who would lead the round, at what valuation, and whether Mubadala’s role would change. The people familiar with the matter stressed that nothing is decided. In the Gulf’s AI race, the next move is usually the one being discussed quietly.
